MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-Second Session
March 10, 2003
The Committee on Commerce and Laborwas called to order at 2:08 p.m., on Monday, March 10, 2003. Chairman David Goldwater presided in Room 4100 of the Legislative Building, Carson City, Nevada, and, via simultaneous videoconference, in Room 4401 of the Grant Sawyer State Office Building, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. David Goldwater, Chairman
Ms. Barbara Buckley, Vice Chairman
Mr. Morse Arberry Jr.
Mr. Bob Beers
Mr. David Brown
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. Josh Griffin
Mr. Lynn Hettrick
Mr. Ron Knecht
Ms. Sheila Leslie
Mr. John Oceguera
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Mr. Marcus Conklin, District No. 37
STAFF MEMBERS PRESENT:
Vance Hughey, Principal Research Analyst
Diane Thornton, Senior Research Analyst
Sharee Gebhardt, Committee Secretary
OTHERS PRESENT:
Lori Ashton, Legislative Advocate, Southwest Regional Council of Carpenters
William “Buzz” Harris, Legislative Advocate, Nevada State Contractors’ Board
Gary Milliken, Legislative Advocate, Associated General Contractors
Michael Tanchek, Deputy Labor Commissioner, State of Nevada
Larry Spitler, Associate Director, AARP Nevada
Doris Alcorn, Volunteer Leader, Consumer Issues Advocacy, AARP
Bob Gastonguay, Legislative Advocate, Nevada State Cable Telecommunications, Association
Steven Tackes, Legislative Advocate, MCI/WorldCom and Eschelon Telecom
Timothy Hay, Chief Deputy Attorney General, Bureau of Consumer Protection
Robert A. Ostrovsky, Legislative Advocate, Cox Communications Company
James T. Endres, Legislative Advocate, AT&T Communications of Nevada, Inc.
Patricia Jarman-Manning, Commissioner, Nevada Consumer Affairs Division
Bobbie Gang, Legislative Advocate, Nevada Women’s Lobby
Mark Nichols, Executive Director, National Association of Social Workers, Nevada Chapter
Margaret McMillan, Director, Government Affairs, Sprint
Mary Lau, Executive Director, Retail Association of Nevada
George Ross, Legislative Advocate, AIG Claim Services, Inc.
Samuel McMullen, Legislative Advocate, Las Vegas Chamber of Commerce
Valerie Rosalin, Director, Office of Consumer Health Assistance
Tom Wood, Legislative Advocate, Pharmaceutical Research/Manufacturers of America (PhRMA) and Wyeth Pharmaceuticals
Pat Elzy, Legislative Advocate, Planned Parenthood Mar Monte, and Planned Parenthood of Southern Nevada, Las Vegas
Fred Hillerby, Legislative Advocate, Nevada State Board of Pharmacy
Amanda Vertner, National Organization of Women
Joe Edson, Legislative Advocate, Progressive Leadership Alliance of Nevada (PLAN)
Chairman Goldwater called the meeting to order at 2:08 p.m. All members were present and there was a quorum present. He welcomed everyone and invited those individuals wishing to speak to sign in with the secretary. Chairman Goldwater advised there were a number of bills on the agenda and they would proceed in no particular order. He opened the hearing on A.B. 190.
Assembly Bill 190: Makes various changes related to contractors. (BDR 54‑406)
Assemblyman David Parks, District No. 41, presented A.B. 190, and he introduced Lori Ashton, who, he said, had done much of the preparation of the bill.
Lori Ashton, Legislative Advocate, representing Southwest Regional Council of Carpenters, explained the bill had evolved over the last two years, which put the burden of certified payroll reporting on public agencies rather than under the strict monitoring of the Labor Commissioner. She said some of the problems came from allowing the Contractors’ Board to receive information from public agencies, as well as from the Labor Commissioner, the United States Department Of Labor, or other entity that had knowledge of the wage and hour violations.
The second problem, Ms. Ashton advised, dealt with unscrupulous contractors. She explained once a contractor was licensed, the Contractors’ Board had little or no authority to address any violations without a lengthy litigation process. The amendment allowed and broadened the Board’s authority to stop a contractor on the job if he was not properly licensed. Current statutory language, she said, tended to undermine the industry.
Additionally, Ms. Ashton noted, the sponsors felt it was important that not only should the contractors be penalized at one level, but also the Labor Commissioner should provide further scrutiny with the power to debar them from the Public Works process. Part of the insertion language, she said, was that if the Labor Commissioner had debarred a contractor, the Contractors’ Board could also debar him or suspend his license for the same period of time. In other words, she explained, the Contractors’ Board could concur with the determination because it took several egregious acts before a Labor Commissioner would debar a contractor.
Ms. Ashton said the drafters used “shall” rather than “may” because of the time involved by the Contractors’ Board to investigate and litigate hour and wage violations. She gave an example of a contractor who committed a number of violations. The Labor Commissioner began an investigation. Halfway through the process, the contractor delivered notarized papers to the Labor Commissioner, signed by his illiterate Hispanic workers, attesting to the falsity of the charges against the contractor. The Labor Commissioner ultimately found that those reports were false. The matter went before the Contractors’ Board because the law said if three substantiated claims were brought forward, the Contractors’ Board should impose a fine and cause other disciplinary actions. The Labor Commissioner debarred the contractor for one year. Ms. Ashton noted that it took a year and a half for the Contractors’ Board to complete their investigation. Ultimately, the contractor was fined a substantial sum. It took two and a half years for the Board to impose the bond mandated by statute. She advised that the process overburdened the Board. The purpose of A.B. 190, she said, was to deter a contractor from violating the law in the beginning. If he realized that, not only would he be prevented from doing public work, but he also could not work in the private sector.
Ms. Ashton summarized that numerous changes were made to empower the Contractors’ Board to address problems with contractors who cheated both the public and the private sectors.
Assemblywoman Giunchigliani asked whether the Contractors’ Board was willing to accept that purview under their jurisdiction, and whether they would be present to testify.
In response, Ms. Ashton noted that Buzz Harris was there. She said she thought the only concern the Contractors’ Board had raised was their preference of “may” rather than “shall.” She said that was why she explained the sponsors’ wording of “shall.”
William “Buzz” Harris, Legislative Advocate, representing the Nevada State Contractors’ Board, expressed the Board’s preference for “may” rather than “shall” in the language in Section 4, subsection 4 (Exhibit C). He said including “shall” would not allow due process with the Contractors’ Board if the Division of Industrial Relations took their appropriate action.
Ms. Giunchigliani recalled that former Assemblyman Matthew Callister had brought the same issue forward in 1989 and Ms. Giunchigliani had raised it in 1991. She said that providing the Contractors’ Board with the right to fine dishonest contractors had not been sufficient to stop their illegal behavior. She questioned why the Board continued to stall when the Legislature could empower them to pursue bad contractors, noting that A.B. 190 would not impinge on a contractor’s due process. She said that 12 years had elapsed since that first legislative effort was made and it was time they changed the language to “shall.” She believed the Board’s concern was unreasonable.
Assemblyman Brown disclosed that he was an attorney who had represented contractors. He agreed that the Board needed some “teeth” in debarring, but said that he had concerns with the due process issues. He recalled legislation enacted last session that permitted contracting entities dealing with public works to establish criteria whereby they would be able to receive applications for public works from contractors. He said he had seen the list of criteria for the City of Las Vegas, which went far beyond what was enacted by the statute. He said he thought there should be some kind of fining or conviction of wrongdoing. Instead, he said, the City of Las Vegas included as criteria mere reports with the Labor Commissioner that could then be used to make a decision as to whether the public entity would accept that contractor as a contractor under the pre-qualifications statute. He said he had concerns about giving the Board authority when they might make a decision based upon a public entity whose criteria might not fall within the statute.
Ms. Ashton acknowledged Mr. Brown’s concerns regarding the pre-qualification. She said the sponsors had broadened it to include settlements because it was costly to litigate through hearings. She explained that approximately 80 percent of the Labor Commissioner’s cases were done through settlements. She said a Labor Commissioner’s decision to debar a contractor from doing public works was based on multiple violations over several projects or several years. She said if a contractor was cheating on wage and hour reports on public projects, there was the likelihood that he was cheating on overtime, on worker’s compensation, and everything else that dealt with state law. She surmised that if a contractor were willing to cheat when under the scrutiny of the public eye, he would do likewise when working for a private citizen.
Assemblyman Brown referenced NRS 338.017. He asked whether it was an action by the Labor Commissioner or if it dealt with disqualification by another public entity.
Ms. Ashton responded that it would only be a disqualification or debarment by the Labor Commissioner, and not a failure to qualify on a project.
Assemblyman Brown said that after careful review he might still have further considerations.
Assemblyman Beers said he was concerned about the small contractor who probably started in the private sector. He believed the requirements were more stringent with public works. He said a small contractor would be concerned that if he bid and won a public works job, and then made some error, his whole contracting license could be revoked. He said his whole livelihood would be lost. He was concerned that this would be a deterrent to competitive bidding in public works. He noted that general contractors would have trouble finding qualified subcontractors to bid.
Ms. Ashton disagreed. She thought A.B. 190 would instead eliminate the cheating contractors and “level the playing field” for the minority and legitimate contractors. She said the reason contractors came in exceptionally low on public works was because they cheated. She noted there had been no severe penalties, and if a contractor incurred disbarment, they always could continue to work in the private sector for the duration of the penalty. She noted the bill addressed large dollar amount violations.
Assemblyman Beers asked whether the proposed change to the statutory language would mandate revocation of a license for a single violation.
Ms. Ashton responded that it would not. She explained A.B. 190 allowed the Labor Commissioner, after investigation on wage and hour violations, to determine whether a contractor was guilty of egregious violations. In turn, the Labor Commissioner could debar the contractor from public works and allow the Contractors’ Board to concur with the time frame. He could also suspend the contractor’s license. She noted that a suspension would not prohibit a contractor from completing projects currently in progress. By suspending them, the contractors would have time to finish projects, reform their work ethics, and return to business. There needed to be a clear message to the industry that the public would no longer tolerate contractors who exploited workers or cheated the public out of funds.
Assemblywoman Gibbons asked whether all of the Contractors’ Board made the decision or just one person.
Mr. Harris asked whether she was referring to the Contractors’ Board as far as hearings on decisions. Ms. Gibbons responded in the affirmative. Mr. Harris responded that the whole Board would sit for a hearing for revocation or suspension.
Chairman Goldwater asked whether the singular noun form of “failure to file a report” in Section 5, subsection 9, should be more permissive to allow more than one failure, or whether the type of report should be specified.
Ms. Ashton asked whether he was referring to “failure to file a report that is required for a contract for a public work.” Mr. Goldwater confirmed he was. Ms. Ashton said there had been some question in the industry of whether subsection 9 dealt strictly with certified payroll reports. She added that inclusion of subsection 10, “submitting false information in any report” was imperative because of the pre-qualification that was adopted. She said some contractors were found trying to circumvent the system again. The contractors would not complete the reports, or they would omit items from their reports. She noted there were only minimum penalties for these omissions. She said the contractor needed to be evaluated from a broader spectrum.
Gary Milliken, Legislative Advocate, representing the Associated General Contractors, testified that he had suggested the addition discussed for Section 5, subsection 9. He noted that in some large public works projects, hundreds of documents would be filed. He asked whether a contractor who was a day late with a filing would be penalized. He also asked whether there was a specific report or reports for which there would be a penalty.
Chairman Goldwater advised Ms. Ashton to visit with Mr. Milliken regarding his concerns, noting there was a big agenda the Committee needed to get through.
Mr. Milliken said he also wanted to comment on Section 7, regarding settlements. He noted that both sides, to reach an agreement, used settlements and if the settlement process were not initiated, it would lengthen the time to resolve the problem.
Michael Tanchek, Deputy Labor Commissioner, testified against A.B. 190 as currently written. One concern he had was with the language in Section 7, subsection 3(c)(2). He said there were a lot of reasons for compromising a claim or entering into settlement agreements. He observed that not every case was due to heinous conduct by a contractor or subcontractor. He thought inclusion of that language would remove the incentive to settle the claims, resulting in protracted litigation. Ultimately, he noted, this would hinder providing the employees with their wages in an expeditious manner.
Mr. Tanchek said the Contractors’ Board had also reviewed Section 4, subsection 4, where they wanted the discretionary language of “may.” He said they had no problem with that, but they would like the same consideration in Section 6, subsection 2. The Labor Commission would like some discretion in the “shall report” language as to whether the conduct in itself was egregious enough to warrant reporting.
Mr. Tanchek summarized that the Labor Commission would like the language “entering into a compromise” deleted at the end of A.B. 190. They would like discretion in dealing with some of the other problems.
Assemblyman Knecht said he shared some of the Labor Commissioner’s concerns, as well as those of Mr. Milliken.
Chairman Goldwater directed the interested parties to work through the sponsor of the bill, Assemblyman Parks, to prepare something for the coming Friday’s work session. He commented that there might be some issues that could not be compromised, in which case he would leave it to the sponsor to communicate how he wanted the bill handled.
With no other testimony, Mr. Goldwater closed the hearing on A.B. 190. He then opened the hearing on A.B. 232.
Assembly Bill 232: Requires establishment of registry of certain telephone numbers and prohibits telephone solicitors from making unsolicited telephone calls to telephone numbers included in registry under certain circumstances. (BDR 52-1073)
Assemblyman Marcus Conklin, District No. 37, introduced A.B. 232 and spoke from prepared testimony (Exhibit D). He explained the techniques used by some telemarketers and described problems consumers incurred due to unsolicited telephone calls. Mr. Conklin also described fraudulent telemarketers and options currently available to the consumer to curtail telemarketing. He discussed other states’ efforts through legislation to prohibit telemarketing, and noted that all of the states contiguous to Nevada had enacted legislation to prevent unwanted telephone solicitors. He then briefly reviewed the provisions of A.B. 232.
Larry Spitler, Associate Director, AARP Nevada, testifying in support of the bill, spoke from prepared testimony (Exhibit E). He said that AARP was a non-profit organization dedicated to making life better for people aged 50 and older. He explained how the AARP worked with legislatures in various endeavors. He stated that Nevada had over 258,000 AARP members, and indicated a number of members were present to show their support of A.B. 232.
Chairman Goldwater invited the members of the AARP in the audience to stand and show their support of the bill. He thanked them for their interest and said he was gratified to see nonprofessionals participating in the legislative process.
Mr. Spitler acknowledged the hospitality received by the AARP members in observing the legislative process from the previous day. He then introduced Doris Alcorn.
Doris Alcorn, Volunteer Leader, Consumer Issues Advocacy, AARP, testified in support of A.B. 232. Her prepared testimony was also included in Exhibit E. She stated that telemarketers intruded on the privacy of citizens in their homes. She provided statistics regarding the number of calls made per day, the costs to the consumer, and the percentage of telemarketing calls directed to the elderly. She described the specific legislation that AARP endorsed and concluded that A.B. 232 addressed all those issues.
Assemblywoman Giunchigliani asked Assemblyman Conklin if he knew where the drafting department got the language on page 4, beginning on line 20. She said it seemed similar to their “push/pull” language that was passed six years ago. She said, if that was the case, it had been upheld and managed, which would provide a premise from which to work.
Assemblyman Conklin replied that he was not familiar with the “push/pull” statute. He said this particular language came either from California’s “no call” bill or from Indiana’s.
Assemblywoman Giunchigliani suggested that would be useful evidence to prove the legislation could work.
Assemblyman Conklin added that they had been very particular to draft a bill that had zero exceptions. He said that was why they clearly identified telephone-marketing solicitors. He said that charitable organizations were an exception, along with political parties and political candidates, in an effort to preserve freedom of speech.
Assemblywoman Giunchigliani inquired whether there was funding provided through the federal government for states to establish “no call” legislation to parallel that which was done at the national level.
Mr. Conklin responded there was no funding.
Assemblywoman Leslie asked whether the Attorney General’s office was responsible for overseeing the program and the registry fund. She asked whether he was thinking of the Bureau of Consumer Advocates within the Attorney General’s office.
Assemblyman Conklin said that was not exactly the case. He referenced a list of over 30 states that had bills similar to A.B. 232. He said about 40 percent of the states had the authority housed in the Attorney General’s office. The remainder of states placed it with the Secretary of State, Consumer Advocate, or the Department of Consumer Affairs. He said the sponsors were willing to place the authority in the appropriate place. He said he personally, as a consumer, thought placing the authority with the Attorney General would provide more “teeth” to the bill.
Assemblywoman Giunchigliani noted that the Consumer Advocate’s office in Nevada was under the Attorney General’s office.
Assemblyman Conklin said he would place the authority under the Attorney General and, from there, it could be placed at the Attorney General’s discretion.
Assemblyman Griffin inquired whether there had been enforcement problems in the other states with similar legislation. In particular, he asked about jurisdiction concerns regarding call centers that were located out of state.
Assemblyman Conklin responded that it had not been a “total problem.” There were some concerns because of the nature of interstate business. He believed the Attorney General had indicated it would not be a problem, as they had experienced reciprocity between other states’ Attorney General offices. He said he did not believe it would be any violation of any constitutional right or commerce clause.
Assemblyman Arberry asked how this would affect companies who used “cold-call” during the day. He asked whether it would put companies out of business.
Assemblyman Conklin said that he could not accurately say. He offered that A.B. 232 would create a registry for people who did not wish to be called. He opined that a telemarketing business realized that it took many rejections to get an acceptance. He said the list eliminated the rejections. He said he believed the people remaining would be more favorably inclined toward telemarketers. He offered that it might save time and money for businesses.
Chairman Goldwater inquired whether this type of legislation worked in other states.
Assemblyman Conklin said he did not know. He noted that Florida’s law had been enacted in 1998, and since then, 29 other states had followed suit. He said he could assume that it was working in those states because more states had enacted the legislation. He noted that the federal government was also facilitating the process. Additionally, he said that in the states that had enacted comparable laws, a substantial number of citizens had signed the “no call” list. He said the number was anywhere from 100,000 to 500,000 people. He explained that the volume of interest by the consumers put legislators, governors, and attorney generals “to task” to ensure the legislation was effective.
There were no further questions for Assemblyman Conklin. Chairman Goldwater called for other people who wished to testify to come forward.
Bob Gastonguay, Legislative Advocate, representing Nevada State Cable Telecommunications Association, testified in opposition to A.B. 232. He said that there was a federal registry that would be administered by both the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC). He said legislation to fund the registry was currently lying on the President’s desk. From his perspective, a state registry, in addition to the federal registry, was counter-productive.
Steven Tackes, Legislative Advocate, representing MCI/WorldCom and Eschelon Telecom, spoke in opposition to A.B. 232. He mentioned the federal law recently enacted, H.R. 395 (U.S. House of Representatives Bill No. 395) (Exhibit F). He briefly explained the four sections. He said the end result was a singular “do not call” list, which, he believed, solved many of the problems. He said it created one set of standards, which “captured” the people who did not want to be called and also the companies who were doing the calling. Additionally, he said, it provided funding.
Chairman Goldwater requested that Mr. Tackes “walk the Committee through” how a consumer could seek a remedy under the federal legislation.
Mr. Tackes responded that the federal law required the FCC to develop the rules. He said the FCC had opened a rule-making docket last fall to adopt the rules, but they were not yet in place. Presumably, he said, if they followed the guidelines set out in the law, individuals would notify the federal registry of their intent not to be called. The FCC would be the repository of the list and would require any call center or telemarketer to obtain the list, which, in so doing, would restrict the calls. He said until the precise rules were enacted, he could provide no further details. Mr. Tackes referenced that last session a similar bill was proposed and he had testified regarding the Direct Marketing Association. He explained that the Association provided a free service by which anyone could be listed at no charge. He said he could personally testify to the efficacy of their listing. He said it was a voluntary list, but that it appeared to work.
Assemblywoman Buckley said she had a concern with waiting for the federal government to enact legislation. She opined that if a federal law could be expeditiously enacted, it would be her choice to have one national list; adversely, however, the legislation had not been funded, the national deficit was continuing to grow, domestic programs were getting cut, and federal bureaucracy would require time to prepare the regulations. Ms. Buckley concluded that Nevada citizens should not have to “wait forever” for the federal government to protect their rights.
Mr. Tackes answered that the federal bill first addressed a time frame and required the FCC to respond within 180 days. He confirmed that the federal bill was not open-ended. Second, he said the funding was contained within the language of the bill passed by Congress. He believed Ms. Buckley had brought up excellent points, but both concerns were already addressed in the legislation.
Assemblyman Beers asked what the price tag was for A.B. 232.
Timothy Hay, Chief Deputy Attorney General, Bureau of Consumer Protection, stated that his department had not been contacted on the fiscal implications of the bill. He said if it were to be placed in the Bureau, the Deceptive Trade Revolving Fund would probably be an adequate funding mechanism with only some slight changes in its current language. He said the Bureau had not solicited cost proposals for implementation of the list. From the states that he had surveyed of similar populations, he estimated $200,000 for start-up costs. Mr. Hay advised if that were funded out of the Deceptive Trade account, it would not be General Fund monies.
Mr. Hay also wanted to address Ms. Buckley’s question on the federal legislation. He said there was no current indication that either the FTC or the FCC intended to pre-empt state legislation, which could be more restrictive than that of the federal government. He also noted that the federal law had bifurcated jurisdiction; there were different rules for airlines and banks than for financial institutions, telephone companies, and other telemarketing entities. Mr. Hay believed there was a benefit in having a tough, enforceable state list. He also indicated his approval of the draft A.B. 232 before the Committee.
Assemblywoman Leslie asked if the authority was not placed in the Bureau of Consumer Protection within the Attorney General’s domain, was there another logical place within the office where it could be placed.
Mr. Hay said he had not consulted with the Attorney General regarding that question. He advised, however, that the Bureau did have the enforcement responsibility under Nevada Revised Statutes, Chapter 598, for other deceptive trade and telemarketing practices. He said it would appear to him the Bureau would be the logical place since the Bureau had a funding source that would be available. Also, he noted that about half the states that had legislated a similar bill had placed the function under the Attorney General’s office. Mr. Hay noted there was no state paradigm, but expressed the Bureau’s willingness to implement the legislation, should they be assigned the task. He estimated that they could probably have the list functioning within six months after the effective date.
Assemblywoman Leslie agreed with Mr. Hay that the Bureau seemed the logical place to implement the law.
Assemblyman Griffin asked whether there had been any challenge to enforcement from telemarketers accused of fraud. He noted particularly those telemarketers that operated out of state. If it were challenged, he asked whether A.B. 232 would alleviate the problem.
Mr. Hay responded that there were actually two issues. He said there were existing laws to prosecute and noted there was a successful track record of prosecuting unscrupulous telemarketers. He said he believed the intent of the current legislation was more to relieve the consumer from the burden of receiving unsolicited calls from telemarketers. He cited the Indiana statute, which most closely paralleled A.B. 232, and reported that it had been tested in court and thus far had withstood judicial scrutiny. Mr. Hay also believed the bill would not be problematic to enforce on out-of-state telemarketers. He said whether a telemarketer resided inside or outside the state, he still would be required to purchase the list and prove compliance with the list from his database.
Assemblywoman Buckley asked if the registry were placed in the Bureau, could the front-end costs be absorbed through the non-general Deceptive Practices Fund. Furthermore, she asked whether the registry could then be funded through the fees to be assessed to the telemarketers.
Mr. Hay said the Bureau had not received a request to provide input on a fiscal note. He explained the Deceptive Trade, 1039 account, was a revolving fund. The income into the fund was episodic and a certain amount was reverted at the end of each year. He offered to prepare a preliminary assessment of the implementation costs if the Committee would like. Mr. Hay advised if they removed the $250,000 cap for this biennium in order to finance the start-up costs, he believed they could fund the up-front costs without burdening the General Fund. He added that once they could identify the volume of telemarketers who wanted to purchase the list at the price determined by the Committee, those fees would probably fund the ongoing expenses. He stated his belief that once the system was operating, they could essentially have an automated system. A consumer could put his number on the Internet without requiring human interface, or he could mail a form. Mr. Hay believed that the fees generated from fines and penalties, as well as the revenue from telemarketers’ purchases of the list twice a year, would adequately fund the program without committing to any General Fund resources for the program. He suggested more detailed analysis could be prepared if the Committee desired.
There were no other questions. Chairman Goldwater called Bob Ostrovsky to testify.
Robert A. Ostrovsky, Legislative Advocate, representing Cox Communications Company, said that although they supported Assemblyman Conklin’s effort to resolve the problem of unscrupulous telemarketers or unwanted telephone calls, they opposed A.B. 232 in its current form. He said they would support the bill if it were amended to address some of the needs of Cox Communications. He said the bill draft eliminated telephone communications between legitimate businesses in the state and the customers of those businesses. He provided an example: Cox Communications, operating as Cox Cable in Clark County, recently telephoned its clients regarding a Las Vegas prize fight that was blacked-out to cable users. Service was not available on a pay-for-view basis until forty-eight hours prior to the fight. From their records at Cox Cable, they knew of clients who regularly purchased all the prizefights. He said that as soon as the blackout was ended, Cox Cable called those customers from their call center to advise them they could purchase the fight. Mr. Ostrovsky noted that other times a company would contact their customers to inform them of special sales. He also mentioned that the company monitored the amount of data delivered to customers with cable modem services and would contact the customers to advise whether they should upgrade or downgrade the size of their cable modem service.
If A.B. 232 were enacted, Mr. Ostrovsky noted, a legitimate company would be prohibited from contacting their clientele. He said the solution would be to allow companies with existing business relationships to be able to contact their customers. Mr. Ostrovsky gave a personal example, explaining that he regularly used a tree-trimming service. At the appropriate time the company would call to remind him and inquire whether he needed their service. He emphasized this was a service the company provided. He contrasted this with the harassing, inappropriate calls Assemblyman Conklin had referenced in his testimony.
Mr. Ostrovsky said he would support an amendment to the bill that would allow telephone calls for existing business relationships, even if it required a business to have its own “opt-out” list for clients. He added that Cox Communications utilized an “opt-out” list, which allowed customers to call them at any time to have their names removed. He also advised that Cox Communications mailed an annual notice asking if customers wanted their names removed. He noted that there were federal statutes, and the FCC had the authority to fine cable companies up to $11,000 per day for violations. He provided the Committee with a memorandum (Exhibit G) written by Gardner F. Gillespie, Cox Communications’ Washington D.C.-based counsel, which detailed the existing business relationship rules of the FCC and FTC as they applied to cable companies. Mr. Ostrovsky also provided the Committee with a matrix of the states with “do-not-call” lists (Exhibit H), which identified the code site, any exemptions, and any relevant notes. He said of the 32 states that had adopted a call list, only one state, Indiana, had failed to adopt language exempting existing business relationships. He explained that Indiana had a “no call” list that exempted only newspapers. He offered his assistance to the Committee to draft reasonable changes to A.B. 232.
Assemblywoman Buckley acknowledged that the existing business relationship was problematic. She said she did not support all of the exceptions, but she was stymied by some of them. She asked whether a company, in the normal course of their business, could ask their clients’ preference on receiving time-sensitive information, via a telephone call. She said in that way, the customer would be protected but still would have the opportunity to receive further information. She asked whether the business relationship exception and the written permission would help in that regard.
Mr. Ostrovsky responded that it would seem logical. He said he would advise businesses to include language on their enrollment forms or contracts that detailed their customer contact policy. He said he appreciated, for instance, his credit card company’s fraud department telephoning him regarding suspicious simultaneous calls from two different geographic areas.
Chairman Goldwater asked a question regarding solicitation from the credit card company.
Mr. Ostrovsky responded that the Committee needed to carefully study the language in Section 6 of A.B. 232 that defined “good or service.” He quoted part of Section 6, which defined it as anything of value, a gift, a prize, or other inducement or act.
Chairman Goldwater asked whether telephone calls regarding questionable charges would fall under Section 6.
Mr. Ostrovsky stated he was not sure of that specific example. He affirmed that a business could not make sales calls under the current provisions of the bill.
Chairman Goldwater inquired whether Cox Communications sold consumer information to telemarketers.
Mr. Ostrovsky responded that, to his knowledge, Cox did not sell information even to “affiliates,” but added that he would pose that question directly to Cox.
Chairman Goldwater refined his inquiry to include “share” as well as “sell.”
Mr. Ostrovsky noted that with automatic dialers and other technology, it was unnecessary, in his opinion, to purchase a list.
James T. Endres, Legislative Advocate, representing AT&T Communications of Nevada, Inc., commented that a number of people over the years had worked with the Committee in trying to resolve the issue of annoying telephone calls. He believed there were solutions that would fit the needs of the business world while preserving customer relationships. He offered AT&T’s support to everything Mr. Ostrovsky had presented. He said he understood that the state of Nevada provided an attractive market for the call center business and that it was a booming business for the state. Mr. Endres said the state’s economy and tax structure benefited from the telemarketing industry. He also cautioned that the Committee needed to be sensitive to how A.B. 232 and other similar legislation would affect the continuing entrance of those types of call-center businesses to the state. He offered his willingness to work with the Committee to meet the needs of the state and its economic development, businesses, and the needs of consumers.
Chairman Goldwater asked whether AT&T shared client lists for the purpose of solicitation.
Mr. Endres said he would have to pose that question to AT&T. He noted that AT&T had many affiliates who, he suspected, each had different out-bound calling and telemarketing methods.
Patricia Jarman-Manning, Commissioner of the Nevada Consumer Affairs Division, testified via teleconference from Las Vegas. She said she recently was recovering from an illness at home and received four to seven unsolicited telemarketer calls a day. She opined it was the right of every consumer who owned a telephone to determine who called them. She said no one had any right to offer information about her to someone else that she did not want provided. She added that she did not want to be contacted by anyone at any time unless they had received her permission. Ms. Jarman-Manning said people had contacted the Consumer Affairs Division to complain about the problem and asked to be put on a list, and the Division would have to inform them there was no list available. She said Consumer Affairs supported any legislation that, with a minimum of exemptions, would prohibit anyone from calling anyone who did not want to be contacted.
Bobbie Gang, Legislative Advocate, representing the Nevada Women’s Lobby, testified that the Lobby supported A.B. 232.
Mark Nichols, Executive Director, National Association of Social Workers, Nevada Chapter, said NASW also wanted to be on record in support of the bill. He explained the social work profession advocated for people who were vulnerable and disenfranchised. He noted that, while the AARP had provided excellent support of the bill, there were senior citizens less able to voice their concerns, and NASW represented them in supporting A.B. 232.
Margaret McMillan, Director, Government Affairs, Sprint, testified that Sprint supported the existing business relationship provision discussed by Mr. Ostrovsky.
Mary Lau, Executive Director, Retail Association of Nevada, testified in opposition to A.B. 232. She expressed the Association’s support of consistency, recognizing that the FCC and the FTC were working together to develop relationships and language that were consistent. She said the Retail Association preferred a simple “one-stop shopping” list for their customers. Ms. Lau said they supported the existing business relationship provision. She said they recognized the need for legislation, but desired consistency across state lines.
George Ross, Legislative Advocate, representing AIG Claim Services, Inc., said AIG was not asking for major changes to A.B. 232, but noted AIG currently enjoyed customer satisfaction with their product line. He continued, because of that relationship with those loyal customers, AIG had a good idea of what other available products those customers would like. He said they were willing to work with the Committee on the bill to enable AIG to continue to communicate with its existing customer base.
Samuel McMullen, Legislative Advocate, representing the Las Vegas Chamber of Commerce, noted that business practices were always a concern to the Chamber. He explained that they had surveyed small businesses to learn if unsolicited calls were a commonly used marketing tactic. The result indicated it was used. He said a lot of businesses would prospect through their existing customer base and have their employees make calls during slow business hours. He said that sometimes calls were made regularly and other times only during promotions. Mr. McMullen noted that a slow economy seemed to stimulate the need to make more calls. For example, he said a gift shop that dealt in collectibles liked to contact their clients to inform them of the availability of a new collectible in a line. He said the shop was concerned when they were notified the provisions of A.B. 232 prohibited this. He noted that it was difficult, particularly in retail, to define when a customer relationship was established. Another example he provided was a dry cleaner opening in a neighborhood and wanting to inform the community. He said some individuals considered notification a service rather than a telemarketing tactic. He said the Chamber had concerns about a businessman’s ability to reach out appropriately to his customers or potential customers.
With no other questions or people to testify, Chairman Goldwater closed the hearing on A.B. 232. He directed the interested parties as well as the sponsor to work along the lines suggested by Assemblywoman Buckley to arrive at a bill that would be agreeable. He provided the caveat that a lot of times that would not be possible. He requested any amendments be available for discussion at the coming Friday’s work session.
Speaker Perkins noted the challenges in amending the bill. He said one concern he had was how businesses with existing relationships could interact with their customers in spite of the bill. He interpreted A.B. 232 to not preclude a business from allowing customer contact, but rather provided the customer who did not want contact to have a mechanism to be removed from a business listing.
Chairman Goldwater closed the hearing on A.B. 232 and said they would direct staff to address those concerns.
Chairman Goldwater advised the Committee they would go off the agenda to open a work session on A.B. 194.
Assembly Bill 194: Prohibits insurer from using information included in consumer report of applicant or policyholder for certain policies of insurance. (BDR 57-1114)
Vance Hughey, Principal Research Analyst, Legislative Counsel Bureau, advised that A.B. 194 prohibited the insurer from using information included in a consumer report of an applicant or policy holder for certain policies of insurance. He recalled that during the hearing on the bill, Birny Birnbaum, Executive Director of the Center for Economic Justice, had proposed some technical amendments. Mr. Hughey reviewed those amendments. The first amendment was on page 1, to amend Section 1, subsection 1(a), by deleting lines 5 and 6. This subsection, he advised, prohibited an insurer from requesting or requiring an applicant or policyholder to provide a copy of his consumer report to the insurer. Mr. Birnbaum had explained that consumers did not provide credit reports; instead the reports were developed and distributed by credit reporting agencies. Further, Mr. Hughey explained that Mr. Birnbaum had noted the Federal Credit Reporting Act allowed insurers to obtain reports without permission of an existing customer.
Mr. Hughey continued that Mr. Birnbaum had suggested amending page 1, Section 1, subsection 1(b), to read “Use any information included in the consumer credit report of an applicant or policyholder as a basis for determining whether to issue, cancel, renew or determine [deleting “increase”] the premium for a policy or condition eligibility for a payment plan.” Mr. Hughey said that Mr. Birnbaum had noted many types of consumer reports existed in addition to Consumer Reports. He said the reports included comprehensive loss underwriting exchange reports, and motor vehicle record reports. He continued that Mr. Birnbaum had suggested A.B. 194 only limited insurer use of consumer credit reports and, hence, included the word “credit” in the suggested amendment. Mr. Hughey advised that Mr. Birnbaum had defined “credit” as containing information on credit transactions, credit payments, and credit lines. Mr. Hughey explained that on page 2, Section 1, subsection 3, the word “credit” was inserted between the words in the phrase “consumer report.” Also on page 2, Mr. Birnbaum had suggested changing Section 1, subsection 3(a) by replacing the words “character, general reputation, personal characteristics or mode of living” with the words “or credit transactions.” Mr. Hughey explained that Mr. Birnbaum had advised the current wording, particularly the phrase “personal characteristics,” was too broad and likely would include permissible rating factors such as age and gender.
Finally, Mr. Hughey reported that Mr. Birnbaum had suggested adding a “liberal construction” provision to read as follows: “The provisions of this section shall be liberally construed toward the protection of consumers and away from insurer’s use of consumer credit information in the determination of eligibility for a policy or policy provisions, premium determination, and eligibility for payment plans.”
Assemblywoman Leslie said she had reviewed all of the amendments and she thought they met the intent of the legislation, noting the intent was to limit the use of consumer credit reports or credit rating. She suggested the Committee accept Mr. Birnbaum’s technical amendments.
Assemblyman Hettrick had a question regarding page 2, line 7, which said an entity could not use a credit report or any other kind of oral or electronic communication of information as “a basis for any decision in connection with a transaction.” He stated that he did not believe that was the intent of the bill. He believed the language should state for “any rating determination in connection with a transaction.” He suggested that with the language “any,” an insurer could not talk to the insured by telephone, nor could the insured get any information from the company. He stated he believed the bill should say “rating” determination.
Assemblywoman Leslie asked for clarification. Mr. Hettrick advised he was addressing Section 3. Ms. Leslie agreed with Mr. Hettrick that the language needed to state “any rating determination.”
Assemblywoman Buckley agreed with the concept. She advised the language such as “rating” and “underwriting” which dealt with actually computing the premium price, might need to be reviewed by the legal department.
Assemblywoman Leslie agreed with Ms. Buckley and Mr. Hettrick that the language needed rewording.
ASSEMBLYWOMAN LESLIE MOVED TO AMEND AND DO PASS A.B. 194.
ASSEMBLYWOMAN BUCKLEY SECONDED THE MOTION.
Assemblyman Beers asked whether one of the witnesses had offered to provide the Committee with a study correlating credit reports with insurance risk.
Chairman Goldwater advised that he had received the study and it was on his desk. He added that, in his experience in the Legislature, he could not recall an issue that had elicited so much unsolicited support. He believed, therefore, it was very important to pass A.B. 194 expeditiously.
Mr. Hughey said he thought there was no problem including “rating” or “underwriting” language on page 2, but raised the question whether they also wanted to include decisions regarding issuance, renewal, and cancellation of insurance policies.
Assemblyman Hettrick said he thought the Committee would have to be very careful in their use of language. He noted that “any underwriting decision” would include the decision of whether to write a policy. It would also include whether to cancel a policy. He said they needed to ensure the only restriction was rating determination. Mr. Hettrick said he thought the amendment should be brought back for a review, but added that was the choice of the Chairman.
Chairman Goldwater said they would have the amendment distributed and reviewed at a Floor session, but added, in an effort to hasten the bill’s passage, he wanted to move it out of committee.
Assemblyman Beers advised that he would vote “no” but would reserve the right to vote “yes” at the Floor session, if the pending information was satisfactory to him.
Assemblyman Knecht said he would vote the same as Mr. Beers.
Assemblyman Brown said he also would wait to see the report before voting affirmatively.
Assemblyman Griffin said he would do likewise.
Chairman Goldwater proceeded to take a vote on A.B. 194.
THE MOTION CARRIED WITH MR. BEERS, MR. KNECHT, MR. BROWN AND MR. GRIFFIN VOTING NO.
Chairman Goldwater opened the hearing on A.B. 236.
Assembly Bill 236: Directs Office for Consumer Health Assistance to assist consumers in gaining information regarding certain prescription drug programs. (BDR 18-203)
Assemblywoman Barbara Buckley, District No. 8, introduced A.B. 236. She explained the bill would create a prescription “help desk” for needy individuals who had no insurance. She referenced the difficult choice many Americans faced between purchasing a prescription medication or paying for food or rent. She said many people would ultimately halve their medications or forego their medication entirely. She said she would provide a packet of information (Exhibit I) for the Committee to review. She said that while states grappled with the problem of citizens who had no insurance coverage for prescription drugs, there was assistance available via a prescription help desk. Ms. Buckley advised that seven other states had developed the program. She explained the program provided information and resources to consumers and that most pharmaceutical companies offered free medications to people in need. She said the problem was that most needy people were not aware of the availability of “compassionate care” programs. She advised a patient generally needed only to submit an application, but oftentimes doctors were not aware of the program. She said another problem was the difficulty of identifying the manufacturer of the prescription drug, much less finding its corporate address.
Ms. Buckley explained that the help desk would provide a needy patient with all the Web sites, applications, and other information regarding submitting a request. The end result, she said, would be that the pharmaceutical programs would be better utilized. She concluded the help desk was an economical and prompt avenue for the state to help people. Ms. Buckley said the help desk could also advise people regarding other programs such as Senior Rx, Medicaid, and Veterans Administration assistance. The advantage, she said, would be to centralize the assistance. She said A.B. 236 placed the program in the Office of Consumer Health Assistance created by the Committee in 1999. She reported that Office already was fielding telephone inquiries from people about medical problems. She also mentioned the Ombudsman of that Office had offered her assistance in furthering the program.
Assemblyman Knecht asked what would prevent the proposed help desk from acting as an advocate in any political or legislative initiative. He asked how they could be sure the Legislature in the future would not be addressing remedial measures on problems created by A.B. 236.
Assemblywoman Buckley asked for clarification, noting that the people who would operate the help desk were already state employees. She said they would be working under the same guidelines as other state employees who, she believed, were obligated to provide honest, factual information about the programs under their control.
Assemblyman Knecht cited, for example, the episode recently of teachers coercing their students to write to the Governor and the Legislature advocating higher taxes. He was concerned about the practice of “capture by a client group” by employees to advocate on their own behalf for more government overreach. He asked how the Committee could be certain the same practice would not carry over to a pharmaceutical help desk program.
Assemblywoman Buckley responded that A.B. 236 was as reasonable as any other legislation. She said they could not legislate and predict conduct; however, she stated since 1999 she had worked with the Office of Consumer Health Assistance and they were an excellent staff. She said the Office was a place a legislator could send a constituent to “cut the red tape.” She added that the Office had served both parties very well.
Assemblyman Beers said he first assumed the bill was to assist consumers by providing information about their prescription drugs. He said his first perception was more far-reaching than what the bill would do. He asked whether the bill was geared more toward marketing the various programs available.
Assemblywoman Buckley said the purpose of A.B. 236 was not just to assist people with programs like Senior Rx, noting Senior Rx’s successful marketing program, but to inform the public of existing pharmaceutical programs. She said Tom Wood, representing the pharmaceutical industry, would testify about a program his organization sponsored to help people who could not afford their prescription drugs. To illustrate the problem, Ms. Buckley cited a constituent who was prescribed the drug Zyprexa for mental illness. She said the drug cost $300 per month and the person did not qualify for Medicaid or Senior Rx. She noted that mental health drugs were very costly. She explained that the compassionate care programs offered by some pharmaceutical companies addressed the plight of people like the constituent she had described. She said the bill would help provide information to people who needed assistance. She added that the state programs already had perfected their marketing scheme.
Assemblyman Beers inquired whether the staff of the Office of Consumer Health Assistance was sufficient to handle the program.
Assemblywoman Buckley said she believed the existing staff could handle it. She said this was possible because many of the pharmaceutical companies already had the applications, Web sites, and programs in place. The problem was making the information accessible to the people who needed the assistance. She said A.B. 236 would create a “one-stop shop” for people to get information.
Assemblywoman Giunchigliani wanted to clarify that the bill was to notify consumers and their doctors of what prescription drugs were available for free or for reduced cost. She asked whether doctors were generally aware of the compassionate care programs.
Assemblywoman Buckley confirmed Ms. Giunchigliani’s summary and answered that some doctors were well-informed, but some were not. She referenced a cancer patient she knew from her work with Clark County Legal Services who needed a new cancer medication that had yet to be approved by the patient’s HMO. Ms. Buckley had contacted a cancer doctor who was knowledgeable about the drug and recommended the free pharmaceutical program. Ultimately, she said, the patient was able to receive the medication through the program.
Assemblywoman Giunchigliani asked how the help desk would get the information.
Assemblywoman Buckley answered that a person would be able to use the prescription help desk moniker that would generate interest and bring contacts. She said the Office already did outreach to physicians and community groups.
Assemblyman Griffin asked whether she was aware of a statistic he had seen that indicated administering the right prescription drug at the most opportune time dramatically reduced the costs of long-term health care.
Assemblywoman Buckley responded that she believed the statistic was in her written testimony, or else she could obtain it. She acknowledged it was an “overwhelming” number. She said prompt and proper health care saved a lot of money and also prevented a lot of adverse health problems.
Assemblyman Arberry asked how much the program would cost.
Assemblywoman Buckley answered that the Office of Consumer Health Assistance said they could absorb the cost.
Chairman Goldwater asked whether the agency was present. Assemblyman Arberry said the Committee could then get them on record. Ms. Buckley said she would check on it. Mr. Arberry advised he would take her word on it.
Bobbie Gang, Legislative Advocate, representing the Nevada Women’s Lobby, recalled the creation of the Office of Consumer Health Advocate and said the Lobby saw A.B. 236 as a very good use of the Office in extending their work.
Annette Mills, Legislative Advocate, representing the Nevada Health Care Reform Project, testified in support of A.B. 236 via videoconference from Las Vegas. She advised that the original intent of the Project was to assist people with their health needs and said she was gratified with the work of many volunteers. She shared with the Committee her personal struggle to afford prescription medications for her disabled son. She said the drugs cost $1,028 a month and the HMO had put a cap of $1,000 per year on his medication. When she tried to seek financial assistance in the cost, she was told that as long as her son had health insurance, he did not qualify for programs. She said she had approached many professionals in the health care field before she found a pharmaceutical company who had a patient assistance program. She noted that she finally got assistance last fall, but had to reapply this year and again meet the $1,000 cap. Ms. Mills suggested that had the Office of Consumer Health Assistance implemented the help desk service a year ago, she would have been greatly assisted. She concluded that people needed assistance in health care costs, and the help desk would be an important vehicle in assisting people.
Chairman Goldwater called Valerie Rosalin, Director, Office of Consumer Health Assistance, to testify via videoconference from Las Vegas. Mr. Goldwater asked what the fiscal impact would be from A.B. 236.
Ms. Rosalin said that because the Office was already researching methods of assisting needy patients, she anticipated no further fiscal impact.
Assemblyman Beers inquired what policy impact she foresaw.
Ms. Rosalin responded that she thought it provided more leeway of getting more cooperation from pharmacies. She said currently they researched primarily from the Internet and pharmacy contacts
Tom Wood, Legislative Advocate, representing Pharmaceutical Research/Manufacturers of America (PhRMA) and Wyeth Pharmaceuticals, spoke in favor of A.B. 236. He explained the pharmaceutical industry’s patient assistance programs and the need for a state clearinghouse to provide access to the various programs. He said their goal was to collaborate with the authors of the bill to make the Nevada program the best prescription drug access in the United States. Referencing Exhibit I, Mr. Wood cited, on page 3, statistics from 2002 showed the pharmaceutical companies had helped 5.4 million patients fill more than 14 million prescriptions with a wholesale value of $2.3 billion. He noted on the exhibit’s next page that, for the year 2001, only 9,000 Nevada patients were served out of 4 million nationally. He said PhRMA had recently launched a Web site, (HelpingPatients.org), referenced in the exhibit, which would provide patients, providers, and caregivers access to more than 1,400 medications in 140 company programs and in 185 government and private programs. He explained the exhibit also listed what information would be helpful to have available before accessing the site. He emphasized that patient privacy was protected. Further pages of Exhibit I, Mr. Wood explained, encapsulated current company drug discount programs and provided suggestions for computer access. The last pages, he said, provided a summary of the company’s partnership with the mental health community in providing prescription medicine to needy citizens. He said in the last quarter of 2002, the partnership was able to access over a quarter million dollars’ worth of prescription medications for needy Nevadans. He said they were simplifying the process and would like to work with the Committee to make the program available to all citizens.
Assemblywoman Leslie stated that Oregon had recently cut off its program to provide free antipsychotic medications to thousands of its citizens. She asked Mr. Wood whether his organization made allotments by state for the amount of aid they provided, or would a state like Oregon drain all the prescriptions available to the western United States.
Mr. Wood said there was no budget by state or by country in terms of the program. He advised he could only speak for Wyeth in terms of what was offered. Because anti-trust considerations had created a miasma of different programs, he explained he could not speak collectively for PhRMA as well. He said, however, that the Oregon decision would not detract from other states receiving their benefits.
Assemblywoman Leslie asked if there were a limit to how much aid a company could provide.
Mr. Wood responded that to his knowledge Wyeth had set no limit.
Lynn Vertner, private citizen, testified that she would like to go on the record in support of A.B. 236 because she believed it would help a large number of uninsured or underinsured individuals in Nevada, particularly women and children.
With no further questions or testimony, Chairman Goldwater closed the hearing on A.B. 236. Noting no suggested amendments nor opposing testimony, he invited a motion from the floor.
ASSEMBLYMAN BEERS MOTIONED TO DO PASS A.B. 236.
ASSEMBLYWOMAN LESLIE SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Goldwater opened the hearing on A.B. 144.
Assembly Bill 144: Prohibits employer of pharmacist from disciplining pharmacist for refusing to fill or refill prescription under certain circumstances. (BDR 54-210)
Assemblywoman Chris Giunchigliani, Clark County, District No. 9, introduced A.B. 144. She referenced a handout of suggested amendments (Exhibit J). She noted that the sponsors had been working with various organizations, employers, and the Pharmacy Board regarding the language. She stated that not all concerns had been resolved. She referenced previous legislation enacted in Nevada regarding contraceptives and hormone replacement therapy (HRT) that had been approved by the FDA. Subsequently, she said, a federal district court heard a case (Exhibit J) regarding a pharmacist’s refusal to fill a prescription. She explained a pharmacist, unlike a medical doctor, was not governed by the Hippocratic Oath. She said the court decided that under Nevada law a pharmacist had a “learned intermediary doctrine,” which did not hold a pharmacist strictly liable for filling lawful prescriptions. Therefore, she cited the court decision that, at a minimum, “a pharmacist must be held to a duty to fill prescriptions as prescribed and properly label them (including warnings) and be alert for plain error.”
Ms. Giunchigliani continued that last session she had introduced similar legislation, but because the Pharmacy Board had preferred to adopt a regulation instead, she had not proceeded. She said the Board, subsequently, had failed to adopt a regulation, arguing it was an employer-employee relationship. Ms. Giunchigliani opined that a pharmacist had a legal responsibility to either fill a legal prescription or refer it to someone who would. She said it did not matter what type of drug as long as it was legally prescribed. She acknowledged there were abuses of prescription medications, but added that A.B. 144 was not directed to the fraudulent use of those drugs. She said the sponsors had worked with the Pharmacy Board, who agreed with the language of the bill. She added, however, that the retail side had problems with the current language. She advised that the sponsors did not want to open more loopholes, they just wanted to mandate “fill it or refer it.” She said the sponsors wanted to avoid the area of “employer/employee” relationships. She concluded that under the “learned doctrine” a pharmacist did have a responsibility to fill non-fraudulent prescriptions.
Assemblyman Griffin stated that he had constitutional concerns about the bill. He inquired whether, as A.B. 144 was written, the pharmacist had to go to his supervisor and explain his moral obstacle to filling the prescription.
Assemblywoman Giunchigliani answered that the employers were concerned about building a large document base. She said the drafters had trouble articulating, “you have to fill it.” She conceded the language still needed modification.
Assemblyman Griffin asked whether the notification of the supervisor was optional.
Assemblywoman Giunchigliani confirmed it was and advised that Mary Lau would address some of those concerns in her testimony.
Assemblyman Griffin quoted the last line of the amendment (Exhibit J, page 1): “A pharmacist shall not, when counseling the patient for any referred service, discuss in detail the genuinely held religious belief.” He said he had a problem with the language and technically did not know how that language could be enforced.
Ms. Giunchigliani clarified that the language had been recommended for deletion. She invited Mary Lau’s comments from the employer’s perspective.
Mary Lau, Executive Director, Retail Association of Nevada, testified that the bill last legislative session was withdrawn because of the difficulty of implementation. She said the bill was referred to the State Board of Pharmacy where no testimony was presented at their hearing. She said so many serious issues had arisen, such as religious ideology, pro life, and database compilation, that the Pharmacy Board members had failed to reach a consensus. She advised there was an 18-page summary “thought process” that was prepared by the American Pharmacy Association, which tried to address the moral dilemma versus the individual rights. She noted that each pharmacy also had its own policy to address the problem and some policies provided no leeway for the pharmacist. Consequently, she said it was a very difficult issue, but added that at the pharmacy level, it was agreed that a pharmacist should not interfere with a doctor/patient relationship. But still, she said, an employer did not want to force pharmacists to fill prescriptions for which they had ethical problems. She noted case law said, “You are not practicing medicine, nor are you in a collaborative practice.” She said it was a policy decision to be enacted, which would free employers from the dilemma.
Assemblywoman Giunchigliani said it was a complicated issue, which was why she previously agreed to have the Pharmacy Board address the problem through the regulatory process. She opined it was not the Legislature’s call to interfere with the decisions between a doctor and patient over any prescription, noting that the matter was not just about contraceptives.
Assemblyman Griffin clarified that the amendment would delete everything but those three lines.
Ms. Giunchigliani answered that the last language they were suggesting was what was on the bill. She said they inserted all three paragraphs identified on Exhibit J into the current bill.
Assemblyman Griffin said that he could not understand how a legislature could technically tell someone that they could not discuss their religious beliefs. He acknowledged the challenges in drafting A.B. 144.
Assemblywoman Giunchigliani agreed that a pharmacist should not be disciplined for his personal beliefs. She said the caveat at the beginning said a person would not be disciplined.
Assemblyman Beers stated his belief that, under First Amendment rights, a governmental entity could not proscribe a particular religion to people. He said he did not know whether that right would preclude a government from creating a professional obligation that a pharmacist could not discuss his religious belief. He asked whether pharmacists currently had a legal obligation to ferret out a fraudulent prescription.
Ms. Lau responded that there was a requirement called “professional judgment.” She advised if a prescription appeared not to be authentic, there was a tenet that if it was a first prescription, the doctor should be contacted; if it was a refill, it was not necessary. Also, she added, if the prescription appeared to be forged or tampered with, the pharmacist was obligated to obtain verification.
Assemblyman Beers clarified that a pharmacist was asked to use his judgment to detect a forgery.
Ms. Lau confirmed that was true.
Assemblyman Beers said he had assumed that if a pharmacist had a problem filling a prescription, he would fill it, and then submit a form to his employer regarding his suspicions, and the employer would take action.
Ms. Lau stated that, under current practices, there were policies by each chain pharmacy and some non-chain pharmacies on how to report a concern.
Assemblyman Beers responded that he noted a “gray area” for these situations.
Ms. Lau agreed it was a technical definition of circumstances when a prescription was not filled.
Assemblywoman Buckley said she thought the law should just say: “If it’s a legal prescription, you gotta fill it. That’s your job. It’s not your job to use your judgment.” She asked whether by current law, a pharmacist was not required to fill a prescription.
Ms. Lau responded that, to her knowledge, that was not the law because there were professional judgment standards. She said she could not advise what the law was in other states, referencing the 18-page treatise by the Pharmacist’s Association that dealt with the moral issues of the problem. She added that she did not know whether the employers would object to Ms. Buckley’s suggestion.
Assemblywoman Buckley said she was not proscribing that a pharmacist should not look at interactions with other medicines or call a doctor for clarification. She said she was referring only to when a pharmacist refused to fill a prescription based on his personal objection.
Ms. Lau said that under the Pharmacists’ Professional Standards, a pharmacist had to check the drug interactions and other safety precautions.
Assemblywoman Giunchigliani noted that the Pharmacy Board originally objected to the language of A.B. 144 as being too broad and said the Board had suggested narrowing it to a religious tenet. She said the Board then opposed it for their concerns regarding an employer/employee relationship. She cited again the court decision, which stated a pharmacist’s obligation “to fill prescriptions as prescribed and properly label them, including warnings,” and suggested adding the language “as long as they are filling a lawful prescription.” She advised that they kept it generic, referencing “lawful prescription.” She said that way a pharmacist could still make the judgmental decision whether a prescription might be fraudulent.
Assemblywoman Leslie said she would prefer an amendment that clarified that matter. She inquired whether there was a Hippocratic Oath for a pharmacist.
Assemblyman Knecht said he took a different approach. He said he did not think a person entering into the practice of pharmacy should be required to set aside their First Amendment rights of free expression or free exercise of religion. He said he had spoken with Pat Elzy, who had agreed. He said he thought that the issue was one of balance between the rights and legitimate expectations of the patient and practitioner or employee. He said, in reviewing the amendment and listening to the discussion, he thought the intent was to delete Section b on page 2, but the amendment said to delete Section 1 as a whole except for lines 4 through 7 on page 2 and the insertion. He asked exactly which parts of the original draft would remain if the amendment, as written, was submitted.
Assemblywoman Giunchigliani said the amendment suggested deleting all of Section 1 as a whole except on page 2, lines 4 through 7, and then insert the additional language.
Assemblyman Knecht said it seemed that the last sentence in the amendment was redundant in part at least with lines 4 through 7.
Assemblywoman Giunchigliani said he was reading the amendment correctly, but the pharmacists did not want to use the language “genuine principle or tenet of good faith,” and wanted to use instead “generally held religious belief.” She added the pharmacists still were not comfortable with that. She opined there could be conscientious objection to anything and said Ms. Lau had testified that the Pharmacy Board had tried to deal with that in their internal policies to allow an individual to go to an employer with their concerns. She said that should be allowed; this was not intended as a disciplinary action.
Assemblyman Knecht said that he advocated a requirement to either fill or refer a prescription. He said that because of the First Amendment rights, however, he was uncomfortable with tagging a pharmacist’s reservation to a “genuinely held” religious viewpoint. He queried who could determine something as subjective as that. He said he believed there was a good First Amendment argument besides religion that people should be able to follow their conscience. He said the last sentence in the amendment was problematic to him. In conclusion, he said he could support a basic “fill or refer” in a “simple bare-bones” form because he thought that language found the balance.
Assemblywoman Giunchigliani agreed.
Pat Elzy, Director of Public Affairs, Planned Parenthood Mar Monte, and Planned Parenthood of Southern Nevada, Las Vegas, testified in support of the proposed amendment to A.B. 144. She said her organization believed that all legal prescriptions should be dispensed and that a pharmacist should not override a doctor’s order. Ms. Elzy’s letter to the Committee was distributed (Exhibit K).
Assemblyman Brown questioned whether the First Amendment was affected by a business invitee/commercial provider business, noting that the customers came to the business for a transaction.
Chairman Goldwater said they would have their legal counsel, Wil Keane, address that question. He said he thought they were talking “under the scope” of Nevada licensee.
Assemblyman Brown offered to discuss the matter with Mr. Keane.
Assemblyman Hettrick stated that he had a number of concerns regarding the bill. He said he believed the “must fill” language was reasonable. He said he would advise language as simple as “A pharmacist may only refuse to fill a prescription if he believes it to be fraudulent or it falls outside the accepted standards of the profession.” He said he did not believe, realistically, a patient could get a referral to anywhere else that would make sense. He believed that requiring an “immediate” referral would be impossible. He said the language should just read “fill” with the provisions about fraudulent and accepted standards.
Ms. Elzy said the “fill” mandate could be a problem with inventory because not every pharmacy stocked every medication.
Fred Hillerby, Legislative Advocate, representing the Nevada State Board of Pharmacy, responding to Ms. Giunchigliani’s request, said the current standard allowed a pharmacist some discretion in filling prescriptions. He said health was the first reason. He said generally a pharmacist would not fill a prescription if he had a concern about its efficacy to the patient or its interactions with other of the patient’s medications. He noted the attending physician might not be as informed as the pharmacist regarding the other drugs the patient was taking. Mr. Hillerby advised the pharmacist would consult with the attending physician if he were available, but, he observed, the doctor’s office hours often did not coincide with around-the-clock availability of some pharmacies. Under those circumstances, he would not want to force a pharmacist to fill a prescription that was contraindicated by other drugs the patient was taking. He acknowledged that some people shopped for drugs as well as other controlled substances. He said a person might come with a legal prescription for a potent medication. The pharmacist might check his database and find the person had the same prescription filled from multiple doctors. He said this would indicate a probable addiction and would raise the issue of patient safety.
Chairman Goldwater said those concerns were duly noted and added the sponsor of the bill had indicated those concerns could be addressed at the regulatory level.
Lucille Lusk, Legislative Advocate for Nevada Concerned Citizens, testified in opposition to A.B. 144. She said she believed the primary concern with the bill still remained with the proposed amendment. She said that might change with the suggestions offered by other testimony and the Committee members. She said there was a significant concern with the law imposing on private individuals a duty not to speak of their personal opinions. She said it did not matter whether those opinions were religious or otherwise. She noted that the First Amendment dealt with numerous rights, including the right to free speech.
Chairman Goldwater interjected that he believed no one on the Committee wanted to inhibit anyone’s speech.
Ms. Lusk agreed but said she believed the amended language would inhibit freedom of speech. She said that assuming the Committee was moving in the direction of some testimony provided, the Nevada Concerned Citizens would reassess their opposition.
Chairman Goldwater invited her to work with the sponsor and the other people who testified to work towards achieving a good bill.
Ms. Lusk consented.
Bobbie Gang, Legislative Advocate, representing the Nevada Women’s Lobby, testified in support of A.B. 144 as amended. She referenced her written testimony (Exhibit L). She said the Lobby asked that the Committee solve the problem of pharmacists refusing to dispense a medicine legally prescribed by a licensed physician in the state.
Assemblyman Hettrick wanted clarification from Ms. Gang that the Lobby objected to pharmacists who refused to fill a prescription for reasons other than medications that fell outside of the accepted professional standards.
Ms. Gang confirmed that the Lobby had no problem with the accepted standards. She recalled a personal experience when a pharmacist had questioned her about a medication she had been prescribed. She said at the time she was angry because she was quite ill, but later understood the implications of the pharmacist’s precautionary efforts. She said the Lobby only opposed a pharmacist imposing his personal convictions.
Assemblyman Hettrick agreed. He also stressed that a pharmacist’s recommendation of a generic brand of the same medicine to save a consumer money should not be construed as a wrongdoing or as “not filling” the prescription. He cautioned that care had to be used in crafting the language of the bill to not implicate that type of service. He reiterated the bill should include “not refuse based on accepted standards” and “concern for fraudulent use” in its provisions.
Amanda Vertner, National Organization of Women, testified that originally she had opposed A.B. 144. She added that with the amendments Assemblywoman Giunchigliani had introduced, she would support the bill. She stated that a pharmacist, having graduated from pharmacy school, knew the types of drugs he would need to dispense and if it went against his morals, principles, or religion, then the field of pharmacy was not a good career choice for him. She said it was not a pharmacist’s right to interfere with the doctor/patient relationship.
Joe Edson, Legislative Advocate, representing Progressive Leadership Alliance of Nevada (PLAN), testified in support of the intent of A.B. 144, as expressed by Assemblywoman Giunchigliani and others who had testified. He also said PLAN agreed with the comments of Mr. Hettrick and Ms. Buckley. He said their main concern was the patient’s access to health care, which should not be impeded by the personal beliefs of a pharmacist.
Chairman Goldwater asked for other individuals to testify for or against A.B. 144. There were none and there were no further questions to the Committee. Mr. Goldwater closed the hearing on A.B. 144.
Assemblywoman Giunchigliani agreed to continue to work on the amendments to A.B. 144.
Assembly Bill 119: Revises provisions governing determination of expiration date for certain prescription drugs or medicines. (BDR 54-238)
Chairman Goldwater advised that the sponsor for A.B. 119 had asked for a postponement of the hearing.
Chairman Goldwater asked for a Committee introduction to a bill eliminating an opticians’ authority to fit contact lenses.
BDR 54-1218: Eliminates authority of dispensing optician to fit contact lenses. (A.B. 275)
ASSEMBLYMAN KNECHT MOVED FOR COMMITTEE INTRODUCTION OF BDR 54-1218.
ASSEMBLYMAN BEERS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
Chairman Goldwater adjourned the meeting at 4:52 p.m.
RESPECTFULLY SUBMITTED:
Sharee Gebhardt
Committee Secretary
APPROVED BY:
Assemblyman David Goldwater, Chairman
DATE: